Claims Management Companies
Claims management companies are firms that act as intermediaries between claimants and companies being claimed against. They came into the media spotlight after the furore surrounding the PPI mis-selling scandal.
Find out, by reading this guide, whether or not it’s worth you getting in touch with a claims management company or if you could handle making a claim by yourself without paying a fee to a middle man.
What are claims management companies?
Claims management companies exist to help customers make claims of various kinds, dealing with the paperwork and administrative details for a cost.
They will handle the whole claim for you, representing you and dealing with whatever body it is that you are claiming against.
They handle a variety of different types of claims, from PPI to personal injury claims, for a fee that either takes the form of a percentage of the final pay-out or a flat lump sum, or sometimes both.
Should I use a claims management company?
The main benefit of using a claims management company is simply the added convenience and peace of mind you get from handing your case to a group of professionals.
However, this peace of mind comes at a cost and often, a rather high one at that. Typical fees are around 20% and upwards of the claims value and if you’re charged a flat fee as well, which is not uncommon, you could find yourself paying a large amount for someone else to do what you could do yourself without much difficulty.
Many of the claims you could get them to deal with would not actually be particularly complicated to simply handle yourself. This is especially the case when it comes to PPI claims, hence the focus on claims management companies during the PPI mis-selling scandal.
PPI and Claims Management Companies
The PPI mis-selling scandal in recent years served as something of a boost to the claims management industry.
Payment protection insurance, or PPI, is an insurance product designed to protect you against failing to keep up with any loan repayments in the event that you are no longer able to earn an income. So if you have some kind of illness or injury that stops you being able to work, your PPI policy will pay out and cover your remaining repayments.
It was, however, sold to many customers without their full knowledge or consent, including to customers with pre-existing medical conditions who would not be able to make a claim even if they did need to.
Once the news of the scandal broke and many were rushing to claim against the companies that mis-sold them PPI, claims management companies rushed to the forefront, offering people their services as much as they could.
While this doesn’t, on the surface, look like such a bad thing, when you compare the cost of using a claims management company with the ease with which you could claim for your mis-sold PPI on your own, the problem becomes clear.
Claiming PPI Without a Claims Management Company
If you have a PPI policy that you didn’t need, want or ask for, then claiming back the money you’ve inadvertently spent on it is not difficult, nor does it cost you anything to do on your own.
Where a claims management company might charge you 25% of your pay-out as well as a lump sum to sort out your PPI claim, you could get your money back at no extra cost to yourself.
All you need to do is make sure that you have all of the relevant paperwork and details to hand and simply get in touch with whoever it was that sold you PPI in the first place.
If they do not prove forthcoming then you can take your case to the Financial Ombudsman Service (FOS), a body designed to deal with disputes of this kind.